Italian eyewear manufacturer Safilo has experienced a significant decline in sales for the first quarter of 2020, mainly due to the temporary closure of its stores during the coronavirus pandemic. The company reported that sales during this period were down 11.5% at constant currencies, totaling €221.1 million ($239 million). Additionally, Safilo’s adjusted earnings before tax, interest, depreciation, and amortization margin dropped from 8.1% last year to 2.6% this year.
The company has further cautioned that the sales decline in the current quarter will be even worse than the previous one, as its distribution channels have practically come to a halt. Safilo expects that the gradual and sporadic lifting of lockdown measures by governments in May and June will contribute to lower sales for the quarter. However, there is a silver lining as online sales have surged by nearly 25% at constant currencies in the first quarter, making up 6% of total sales compared to 4% last year, as people have been staying at home to prevent the spread of the virus.
This development is in line with the overall trend in the eyewear industry, as rival company EssilorLuxottica also reported a drop in first-quarter sales and warned that the impact will be even greater in the current quarter for the same reasons. The coronavirus pandemic has had a severe impact on retail businesses worldwide, especially those heavily reliant on physical stores and distribution channels. As restrictions are gradually lifted, it remains uncertain when and to what extent consumer demand will recover.